Early Tesla Motors Investors Raise $400 Million Impact VC Fund

The Wall Street Journal
June 23, 2015

By Yuliya Cher­no­va:

Two ear­ly investors in Tes­la Motors Inc.TSLA +1.86% teamed up and raised a $400 mil­lion ven­ture cap­i­tal fund to back star­tups that have a pos­i­tive social or envi­ron­men­tal impact, Ven­ture Cap­i­tal Dis­patch has learned.

Nan­cy Pfund and Ira Ehren­preis are head­lin­ing the fund, which is part of San Fran­cis­co ven­ture firm DBL Part­ners.

Who cares about sus­tain­abil­i­ty issues? Just peo­ple like Elon,” Ms. Pfund said about Elon Musk, chief exec­u­tive of Tes­la. Mr. Musk and oth­ers like him “debunked the notion of a trade off” between mak­ing mon­ey and improv­ing soci­ety, Mr. Ehren­preis said.

More high-qual­i­ty entre­pre­neurs are start­ing mis­sion-dri­ven busi­ness­es, he said. At the same time, a new gen­er­a­tion of con­sumers cares more about who is involved in mak­ing prod­ucts and how a com­pa­ny makes a prod­uct or ser­vice they pay for. As con­cepts such as fair trade and trans­par­ent sup­ply chains are becom­ing increas­ing­ly impor­tant to busi­ness­es, Ms. Pfund said, such impact invest­ing makes more sense.

Ms. Pfund spun DBL Part­ners out of J.P. Mor­gan & Co. in 2008 and raised a $150 mil­lion fund in 2010. DBL and its pre­de­ces­sor fund, J.P. Mor­gan Bay Area Equi­ty Fund, invest­ed ear­ly in com­pa­nies such as Elon Musk’s Tes­la and Space Explo­ration Tech­nol­o­gy Corp., or SpaceX, as well as SolarCi­ty Corp.SCTY -0.09%, where Mr. Musk is chair­man. DBL also backed online radio com­pa­ny Pan­do­ra Media and solar project devel­op­er Pow­erlight Corp.SPWR -0.38%, now part of Sun­Pow­er Corp., among oth­ers.

DBL’s def­i­n­i­tion of social impact is open-end­ed, from a com­mit­ment to diversity–three of the five star­tups the new fund already backed are found­ed by women, for exam­ple, to pro­duc­ing clean ener­gy, to enabling reuse of mate­ri­als in a sup­ply chain, to cre­at­ing employ­ment in eco­nom­i­cal­ly depressed loca­tions.

To read the full arti­cle, vis­it the Ven­ture Cap­i­tal Dis­patch-WSJ.